Candlestick Patterns

Introduction to Advanced Candlestick PatternsIntroduction to Advanced Introduction to Advanced Candlestick PatternsCandlestick Patterns

Advanced Candlestick Patterns

Fry Pan Bottom Cradle Pattern Jay-Hook Scoop Pattern Belt Hold Breakout Patterns

Fry Pan Bottom

The downtrend starts waning with the appearance of small trading bodies

As the trend starts slowly curling up, a gap up in price indicates that strong buying sentiment has now returned

Fry Pan Bottom

Long Rounded Curved bottom

Fry Pan Bottom – minutes, days, months

The indecisive rounding bottom is the predominant factor

Fry Pan Bottom - Past Analysis

Big Percent move at top has a different meaning when a pattern can be identified

Candlestick Patterns

Fry Pan Bottom measuring point

A dimple usually marksthe Halfway point

Fry Pan Bottom - A Break Out or Failure?

Easy identification of a failure, whichmakes for easy stop loss procedures

Fry Pan Bottom can become a Cup and Handle

CUP Handle

Or a J-hook pattern

Fry Pan Bottom – Exuberant buying

Want to see break out buying

Fry Pan Bottom – What is expected? CLWR – Classic FP results

Candlestick Patterns

MICC – excellent option trades VCI Expected results

55% Gain

SQNM Breaking into new highs INCY What is the entry strategies?

MEOH Option Strategies SPWRA What does a gap up tell us?

Candlestick Patterns

BAS – What do you do with this chart? MD What pattern?

MGM – Next target? Then what? What do we want to see at the end of a FPB?

What Are we looking for now? FPB/J-hook classic

Fry Pan Bottom

J-hook

Candlestick Patterns

Cradle Pattern• The Cradle Pattern is a symmetric

bottom pattern that is easy to identify.

– A downtrend becomes obvious with a large black candle at the bottom.

– A series of small or indecisive trading days trade in a flat area.

– A bullish candle, more powerful with a Bullish Engulfing signal, is formed of approximately the same magnitude as a Bearish candle at the end of the downtrend.

• This signifies that the Bulls have come out of the indecisive trading area with decisive force.

Cradle pattern

Cradle Pattern Cradle Pattern what is the predominant indicators?

Cradle pattern Cradle Pattern at the MA’s

Candlestick Patterns

Cradle patternJay Hook Pattern

• The first move of the uptrend is very strong.

• A candlestick sell signal indicates a pullback about to occur.

• After a few days, small indecisive candles start to appear– Doji, small Hammers,

Bullish Engulfing signals

Jay Hook Pattern• The first test becomes the

recent high• Indecision as found in

candlestick sell signals at the recent high becomes a quick indicator to get out of the position

• A Bullish candle breaching the recent high illustrates that investor sentiment is taking prices up

Jay Hook Pattern

• How to differentiate between profit taking and a full-scale reversal.

J-hook Jay Hook

Candlestick Patterns

J-Hook – How to Identify

Stochastics do not get to the Oversold area

The pull back is stopped whenCandlestick buy signals appear

J-hook - what is first criteria?

A strong price trend

J-Hook with added confirmation

Indecisive trading at a major moving average Adds more evidence of a J-hook pattern potential

J-Hook – Easy Expectations

Scoop Pattern

• An extended flat trading area– Followed by a pullback

• Buy signals bring price back up to flat trading range

• Once price breaks above flat range, look for strong uptrend

Scoop Pattern formation

Candlestick Patterns

Scoop Pattern- Completed Scoop pattern

Scoop pattern off the MA’s Scoop pattern - Do not scan for a Scoop

Scoop pattern Use it to analyze Scoop Pattern - What should happen upon confirming?

Candlestick Patterns

Scoop Pattern - A strong trend to potential targets DHI 50 MA resistance?

Mini Scoops

WY

LVS PCX

Candlestick Patterns

MEE What is the buy criteria? WYNN

Belt Hold Pattern• Strong prevailing trend• The candlestick body

should be the opposite color of the prevailing trend

• Gap on the open, continuing the trend

• The open is the high or low of that trend

• The length of the body should be a long body.

Belthold

Belthold - Adds strength to existing trends Belthold – shows the sellers are flushed out

Candlestick Patterns

Belthold – gets rid of the last of the sellers Belthold

Belthold Belthold Bearish

Breakout Patterns

Knowing when to get on board and when to take profits.

Breakouts

Candlestick Patterns

Breakouts Breakout – where to buy?

Moving AveragesSupport

Candlestick Patterns

Analyzing The Market

DOW

MA’s support and targets MA’s act as magnets

Candlestick Patterns

MA’s and patterns MA’s once breached , will come back and test

MA’s Targets MA’s – first attempts usually fail

Wave 1-2-3 The T-line

Candlestick Patterns

Trend channels Trading Gaps

• Gaps represent enthusiasm to get into a position to the point that investors will pay prices away from any of the previous day's trading range.

• Great for identifying panic selling at the bottom and exuberant buying at the top.

High Powered Scanning Techniques with Candlesticks

• Market trend• Strongest sectors• Strongest signals in those sectors• Additional indicators confirming• Best Target potentials• Easy stop loss points

HAR – Stop Loss

Analyze best potentials• The Signal• The pattern• Where is it moving from? Ma’s, trendlines?• Where is the next resistance area?• What is the sector doing?

Money Management

Eliminate Emotions

Candlestick Patterns

The Point of investing is to have the probabilities in your favor!

Candlestick signals provide the positive probabilities

Candlesticks are merely the graphic depiction of what

investor sentiment is doing

Trend Analysis Made easy with

Candlesticks

2008 Downtrend Easy analysis

Sell signals at declining MA’sDouble Top at 200 MA

Dumpling Top

Cradle BUY J-hook

MA’s support to resistance Double Top at 200 MA

Candlestick Patterns

Dumpling Top has expectations The Bottom – Morning Star/Cradle Pattern

J-hook ends with Cradle pattern What is the market doing Now?

Recent Rec - XTEX CSIQ

Candlestick Patterns

MIPS buying the BO CCME buying the J-hook

SOHU buy on BO Buy when the patterns say to buy - BAS

F signals and MA’s Cradle Pattern – indicates very strong uptrend

What was the market doing?

Candlestick Patterns

DOW trend Signals at the MA’s make HP trades

CORN

XIDE buy on BO confirmation WFR – signals need confirmation

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